Abstract
This study investigates how institutional investors' attention on the earnings announcement day affects corporate investment decisions. I find that the investment of firms receiving abnormal institutional attention is approximately 1.8 times more sensitive to their stock price than that of others. This effect is more pronounced when institutional investors have greater incentives to produce information and when corporate managers have greater incentives and capability to employ the incremental information contained in the stock price. These findings suggest that attention encourages institutional investors to incorporate private information into stock prices, which provides a useful guide for managers' investment decisions.
| Original language | English |
|---|---|
| Pages (from-to) | 3241-3273 |
| Number of pages | 33 |
| Journal | Accounting & Finance |
| Volume | 64 |
| Issue number | 4 |
| Early online date | 1 Apr 2024 |
| DOIs | |
| Publication status | Published - Dec 2024 |
| Externally published | Yes |
Bibliographical note
© 2024 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.Keywords
- attention
- feedback effect
- institutional investors
- investment efficiency
- price informativeness
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